Selling vacation home

[Rebel]

I have been doing a lot of reading the past few hours and I think it's great that there is a place to not only get answers to questions, but also to get support and reassurance that this is doable and I am not alone. Anyway, our biggest concern about filing, and the main reason we have not done so up til now, is that my husband and I own a very small (16x20) vacation cottage that is very precious to us and we simply did not want to give it up. We know we will most likely never have the opportunity again to own such an amazing asset, but we know the only way to pay down our debt is to sell the cottage and file Chapter 13. My questions regarding this sale are as follows:
The attorney says we can sell it on our own, before we file, and if it isn't sold before filing, the sale can be worked into the plan. Does anyone know how this would work, since the only way we have any DMI is by getting rid of the mortgage associated with this property? In other words, how can there even be a plan if the cottage isn't sold?
Also, does anyone have a good suggestion as to the best way to use any profit from the sale? Our attorney suggested putting it toward the mortgage on our main residence. I would appreciate any information or insights. Thanks!!

[Flamingo]

I would suggest seeing a few more BK attorneys in your state to go over your situation. Hopefully you have not yet retained this attorney as you state above "our" attorney.

[Rebel]

Thank you for your response. We have not yet retained this attorney, but had decided that he would be the one to handle this because he and my husband have a prior relationship and my husband trusts him, as do I after meeting with him. Also, he is the only bankruptcy attorney on this side of the city and is minutes from our home. Obviously, the convenience would not matter at all if we did not think he was a good attorney. We had seen two other attorneys previously- one had me so upset I vowed I would jump off a cliff before going bankrupt (though apparently I have had time to rethink that solution) and the other was a referral from my brother, but something about him bothered us, so we looked elsewhere.We did go around with the cottage situation tho, and came to the same conclusion that there is no way to hang onto it. I am very interested to know what aspect of the information I gave previously caused you to think getting other opinions is a good idea. Do you know of any BK situation in which a property like this was salvaged, or are you questioning the viability of working the sale of the cottage into the plan? Or maybe its something else? My greatest concern right now is not being able to unload the cottage in a timely manner so that we can file before the Creditors get nasty. That's why it would be reassuring to know that someone else was in a similar situation and was still able to file, or has some idea of how the trustee might handle it. Thanks for taking the time to address this- it is a very bitter-sweet decision and we need to be absolutely sure it is the right one.

[Flamingo]

Thank you for your response. We have not yet retained this attorney, but had decided that he would be the one to handle this because he and my husband have a prior relationship and my husband trusts him, as do I after meeting with him. Also, he is the only bankruptcy attorney on this side of the city and is minutes from our home. Obviously, the convenience would not matter at all if we did not think he was a good attorney. We had seen two other attorneys previously- one had me so upset I vowed I would jump off a cliff before going bankrupt (though apparently I have had time to rethink that solution) and the other was a referral from my brother, but something about him bothered us, so we looked elsewhere.We did go around with the cottage situation tho, and came to the same conclusion that there is no way to hang onto it. I am very interested to know what aspect of the information I gave previously caused you to think getting other opinions is a good idea. Do you know of any BK situation in which a property like this was salvaged, or are you questioning the viability of working the sale of the cottage into the plan? Or maybe its something else? My greatest concern right now is not being able to unload the cottage in a timely manner so that we can file before the Creditors get nasty. That's why it would be reassuring to know that someone else was in a similar situation and was still able to file, or has some idea of how the trustee might handle it. Thanks for taking the time to address this- it is a very bitter-sweet decision and we need to be absolutely sure it is the right one.

As to your question...because if you retained this attorney and went over your situation why are you questioning what he suggested you do? If you retained an attorney you are happy/comfortable with, he fully knows your financial and asset situation and should fully explain to you why you have to do one thing compared to another. You need to decide whether or not you want the property and whether or not you can actually afford to keep it. It sounds like your attorney is giving you options as to what to do with the property and you have to figure out truly if you want to keep or sell it, if selling it in this economy is at all possible. What you were advised by this attorney is based on your full financial picture which we do not have on this forum.

I would question the fact that the attorney is advising you to sell the cottage prior to filing. If you do that and receive enough proceeds from the sale to pay off your creditors or put toward your first mortgage, filing BK is moot as to the creditors and could be a preferential payment to your first mortgage if you do plan to file as the trustee will have to be informed of the property sale. If you plan to retain this attorney, I would question him further.